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I got let go today but my company (based in NYC) still owes me money, about $12,000 after tax, roughly. Shortly after letting me go, the company asked me to sign a general release. This, in theory, would release them from having to pay me my salary. This seems to me to be an extremely morally suspect move.

Am I right in thinking this? How should I proceed? I am asking law friends to recommend some employment lawyers, but other than this, can I do anything else? I want to claim unemployment ASAP and start working elsewhere ASAP, but I obviously cannot afford to sign a general release and let go of my claim to unpaid salary. Any advice is greatly appreciated. Please let me know if there are any clarifying questions.

This is related to this question on Personal Finance StackExchange and this question on Law StackExchange.

  • People on here are likely going to complain that if something is moral is not a legal question, so I am commenting instead of answering, but yeah don't sign it. – Putvi May 8 at 19:25
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    What is the company offering in return for you signing this release? – brhans May 8 at 19:29
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    I'm being released from restrictive covenants, but they can't enforce them anyway since they can't pay them. In return I release all legal claims and agree to "make myself available" to answer questions arising from my work. Forget that! – Scott Skiles May 8 at 19:32
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How should I proceed? I am asking law friends to recommend some employment lawyers, but other than this, can I do anything else?

You definitely don't need an employment lawyer for this. From a legal standpoint, the matter is very simple: If you grant their request (whether by signing or otherwise expressing your acceptance), you would be waiving any remedies currently available to you for their breach of contract.

The company's attempt to override its contract with you is quite naive, but the company can always (and evidently does) try to get away with its liability nonetheless. I would not be surprised if the company subsequently tries harder to intimidate you, but that does not change your legal position & merits unless you sign the waiver the company is pursuing.

Asking for your post-termination availability reinforces the notion of company's poor planning and subpar management.

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    Could OP offer to sign the release on condition of payment of the $12,000? – phoog May 8 at 22:41
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    @emory Sure. Most companies do sweeten these deals with a nice severance package. But my question is really about the legal implications of explicitly offering to sign subject to such a condition. – phoog May 9 at 1:07
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    @emory As I understand it, if OP says "I'll sign if you pay the wages you owe me" that is not a contract, but an offer. Iñaki Viggers: the release is the company asking the employee to undertake not to sue. In a normal case, the consideration would be the severance package, wouldn't it? I doubt the back wages can be consideration, since the company already owes those. If the employee signs the release without some consideration, how could the company even enforce it? – phoog May 9 at 15:06
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    Bingo, @phoog. Past consideration as well as any act a party is already legally obligated to perform cannot serve as consideration for any new contract. That said, and I'm only speculating now as I do not have enough info from OP to come to a conclusion, but the doctrine of promissory estoppel may be relevant here. – A.fm. May 9 at 15:24
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    @phoog The OP's comment reflects the company's consideration being a release "from restrictive covenants". Conflating in a new contract (1) the release of the OP from covenants, (2) the amount owed to the OP, and (3) the requirement that the OP "make [him]self available to answer questions [about the OP's work]" can only complicate the OP's recovery of his overdue wages, because hitherto unrelated matters now are intertwined in that new agreement. – Iñaki Viggers May 9 at 16:59

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